KUALA LUMPUR – The impact of the recently implemented diesel subsidy rationalisation remains manageable given the government mitigation measures despite the slight rise in inflation prints, said Bank Negara Malaysia (BNM).
Governor Datuk Abdul Rasheed Ghaffour said the measures minimise cost impact on businesses.
As of June, the impact has been rather limited, and given the first half-year performance, the inflation is unlikely to exceed 3.0% this year barring internal and external shocks, he said at the second quarter GDP press conference today.
Therefore, he said the projected headline and core inflation for the year will remain within the 2.0–3.5% and 2.0–3.0% range, respectively.
Rasheed noted that the impact of the diesel and RON95 subsidy rationalisation has been factored into the forecasts to a certain extent.
Nevertheless, Prime Minister Datuk Seri Anwar Ibrahim recently said the RON95 subsidy rationalisation remains off the table for now as the government wants to ensure the public fully understands the exercise.
During the media conference, Rasheed also highlighted the consistent double-digit rise in medical cost inflation, which requires collective actions by stakeholders.
He said medical cost inflation in Malaysia grew 12.6% last year, more than double the 5.6% global average and 6.2% recorded in Asia Pacific.
Therefore, BNM has mandated insurers/takaful operators (ITOs) to provide co-payment options for medical and health insurance and takaful (MHIT) products.
“This is actually to provide a choice to the consumer. We have required banks starting in September to offer products with co-payment elements. So it’s more of an alternative,” he said.
The governor said co-payment products are 19% to 68% cheaper than similar non-co-pay offerings.
To protect consumers, ITOs have to inform the maximum co-payment cap they have set, before consumers purchase any of them. – August 16, 2024